Within the past two weeks, our President announced an additional $50 billion shovel-ready stimulus program to supplement the first one that didn’t work. Then an additional $30 billion so banks can make it easier for businesses to obtain operating loans, and another $30 to $35 billion to bail out the credit unions who have already made such easy loans. And we are talking about $ billions… spelled with a “b”!
Our economy is bordering on depression. The published unemployment rate continues at 9.6%, if you don’t count those who have given up on trying to find a job, and that makes the published rate meaningless. The actual unemployment rate is more like 17% nationwide, and even greater in many of our Middle Tennessee counties.
So what’s the problem? Why are we spending additional $ billions more on bail-outs to banks, credit unions, and corporations, and still our economy stagnates?
The answer is really pretty simple. We continue to subsidize the major corporations and institutions whose bad management practices have caused them to fail, but do nothing to create an economic climate that would encourage the growth of the nation’s small businesses which provide 85% of our non-government employment.
We are told that these small businesses are now sitting on more than $3 trillion in assets that they are unwilling to use to expand their businesses and create jobs. Why are they not doing so? Because they are already supporting the second highest corporate tax structure in the world, and they fear that with the current Bush Tax Cuts scheduled to expire at the end of the year, their burden will become even greater! They are also looking at higher employee health care costs, the pending Cap and Trade legislation that has already passed the house, and the possibility of more onerous labor union legislation, such as the Card Check bill, eliminating secret union membership voting.
Small businesses don’t need more loans, and banks don’t want more government takeovers. Ninety-one percent of small business owners surveyed in August by the National Federation of Independent Business (NFIB) said all their credit needs were met.
Only 4 percent cited a lack of financing as their top business problem. William Chase Jr., CEO of Triumph Bank in Memphis, said, “We have taken a strategic decision not to have our primary regulator, the government, also be a partner in our bank. We already have enough capital to meet the paltry demand for loans. Our business customers are mired in uncertainty and are reluctant to invest in their businesses,”
Before they can grow and create jobs, small businesses need tax relief, and they need a firm government policy on which to base their long-term business decisions.
Is that too much to ask?